News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Trade Setups in EUR/USD, GBP/USD, AUD/USD Ahead of FOMC Meeting

Trade Setups in EUR/USD, GBP/USD, AUD/USD Ahead of FOMC Meeting

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EURUSD, GBPUSD near bottoming/reversal.

- AUDUSD nearing 7-week range high - next stop 0.9150?

- Target on US Dollar’s Back this Week with FOMC, GDP Due

The US Dollar faces paramount event risk today in the form of the October FOMC meeting. This iteration of the policy update may prove hurtful to the US Dollar, as a recently more dovish Fed has emphasized the risks a strong currency poses to their inflation mandate.

Since the September FOMC minutes were released, Fed President James Bullard has even come out and said that further QE might be possible down the road. That has changed the perception of today's event: the official announcement that QE3 will be wound down to $0. If more QE is possible in the future, and rates will remain low for a considerable period of time, then risk sentiment shouldn't be so negatively impacted.

The one comment from the September FOMC minutes stands out: "...that domestic inflation might be held down by persistent disinflation among U.S. trading partners and further appreciation of the dollar."

We can recognize that the Fed is doing well to achieve half of its mandate - maximum employment - yet the inflation target remains difficult to achieve. Here, the Fed has made clear that the US Dollar's recent bull run may be to blame.

A dovish FOMC could have a profound impact thanks to where traders currently stand: notional USD long positioning among speculators is at its second highest level of all-time, per the CFTC's most recent COT report.

Read more: Major Event Risk Ahead for US Dollar - Levels to Watch

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.